When Should You Get Health Insurance?

When does private health insurance become worth it? Should you wait until you’re about to turn 30? Should you cover your children from the day they’re born?

Health insurance for different life stages

Health insurance policies are not a one-size-fits-all product. What you need from a health insurance fund changes as you age and change between different stages of life.

For example, those who have completed their family are unlikely to still need obstetrics cover, or IVF treatment. Households with young children may need an extra focus on dental and optometry – just in case.

What are the main stages of life? Well, Canstar assesses the value of health insurance policies against 12 different stages of life. Read the sections below for more information.

In general, we think it’s a great idea to have health insurance at every age – but we’ve highlighted below why and when health insurance can come in most handy.

Health insurance for young adults

Single people in their 20s and 30s all the way up to nearly middle-age can’t consider themselves invincible, so even if you’re perfectly healthy now, having at least a basic level of Hospital Cover is vital. While you’re busily focussed on studies or career, Extras Cover may not be as important to you – but if you have any particular health needs, it can come in handy.

1. Before you’re 30 – tax profile health insurance

People who buy Hospital Cover before they turn 30 years old can avoid a few tax implications.

First, if you get Hospital Cover before you’re 30, you avoid paying Lifetime Health Cover (LHC) loading in the future. If you don’t have Hospital Cover when you turn 30, then if later down the track you decide to get health insurance, you pay an extra penalty of 2% per year you were without cover on top of the usual insurance premium. Click here if you want to know why LHC loading exists.

Secondly, if you get Hospital Cover before you’re 30, you avoid paying the Medicare Levy Surcharge (MLS). The surcharge is an additional tax that Australian taxpayers pay if they have an annual income over a certain threshold amount and they do not have private hospital cover. Click here if you want to know how much the surcharge costs, what the threshold is, and more.

What to look for: Young people who are looking for health insurance primarily for these reasons should be looking for a low-cost Hospital Cover health plan. There’s no point paying for an expensive, top level Hospital and Extras policy if you don’t need or want it. Also, make sure you check whether your tax profile would actually benefit from having health insurance.

2. Young singles’ health insurance (male/female)

Single people who have Hospital Cover have the option of being treated as a private patient rather than relying on the public system. Single people who have Extras Cover may be able to claim extras such as dental, optical, chiropractic, and physiotherapy benefits depending on their policy.

What to look for: A good value policy that covers what you need – Hospital Cover, and if you have health needs such as dental or optical, possibly also a basic level of Extras Cover. Single people can benefit from comparing many different policies and selecting a policy with the cover they want at an affordable price.

3. Young couples’ health insurance – non-obstetrics

This profile is for couples from young adults up to the middle-ages who either don’t plan to have children, or are postponing starting a family. At this age, Hospital Cover is always vital, and Extras options such as dental, optical, and chiropractic can be useful depending on a couple’s individual health needs.

What to look for: A good value policy with the cover of your choice. Look for a policy that does not include obstetrics, IVF, and childbirth or midwifery. If a couple is not planning to have children anytime in the next year, they don’t need to be paying extra to include birth-related cover!

See below for a snapshot of the current low premium policies available for young couples without pregnancy cover. Please note that this table has been formulated for a young couples seeking hospital and extras cover in NSW with links direct to the providers websites.

Health insurance for adults and young families

Whether you’re happy with your family the way it is or you’re planning more children, health insurance can be useful for adults and families with children. Consider carefully the health needs of both yourself and your children before choosing a policy.

4. Couple or family with obstetrics health insurance

Couples’ and family policies that include obstetrics cover are designed for those who expect to have children now or in the future. Having a baby is expensive, even if you choose the free, public health system, so health insurance provides several benefits if you can afford a couples’ or family policy:

Gap cover where Medicare does not cover all necessary services or only provides a partial benefit, e.g. ultrasound scans, obstetrician visits

Option to see the same doctor for every pre-natal appointment and for the birth of your baby (subject to availability)

Benefit towards the cost of having labour and birth in a private room (being treated as a private patient in a public hospital, subject to room availability) or in a private hospital

Extras Cover policies can include a benefit during pregnancy for remedial massage, physiotherapy, and chiropractic care depending on your choice of policy and insurer

If a couple decides to get health insurance specifically for starting a family, they should plan ahead, as most health insurance policies have a 12-month waiting period for pregnancy-related benefits.

Once you’ve given birth to your first baby, it’s time to look at upgrading from a couples’ policy to a family policy and add your baby to your health insurance. Most family private health insurance policies offer free cover for children until they are at least 18 years old, and longer if they are still dependent (up to 21 years old). Every fund has different rules about covering newborn babies so check with your health fund as early as possible.

What to look for: Couples should look for a health plan that includes obstetrics and will remain affordable within your budget after baby arrives! Avoid policies that include more than you need – after all, you’re probably nowhere near needing hip replacements or multi-focal lenses yet. And again, be sure to plan ahead to account for the 12-month waiting period for pregnancy cover.

Families should look for a quality health policy to cover their entire family. Hospital Cover is especially important for young children, as they are more likely to run into accidental injuries and childhood illnesses in their early years.

5. Young family health insurance – non-obstetrics

This profile covers young to middle-aged couples with a young child or children, and who will not be extending the family any further. They are confident that they will not be needing obstetrics or IVF cover.

What to look for: Young families have a distinct need for a range of Hospital and Extras cover for both the parents and their growing children. Again, Hospital Cover is especially important for young children, as they are more likely to run into accidental injuries and childhood illnesses before they become more coordinated and resilient to viruses.

6. Young single parent health insurance

It’s a fact of life that single parents can struggle more with unexpected medical costs for themselves and their family.

What to look for: We may sound like a broken record, but Hospital Cover is especially important for young children, who are more likely to run into accidental injuries and childhood illnesses. Young, single parents may also consider cover for things their children need, such as dental insurance to cover orthodontics work (if the parent themselves had braces as a child) and regular check-ups to protect fresh, new “adult” teeth, and optical cover for children who need glasses.

See below for a snapshot of the current low premium policies available for young families without pregnancy cover. Please note that this table has been formulated for a young families seeking hospital and extras cover in NSW with links direct to the providers websites.

Health insurance for established or middle-aged adults and families

As adults in their middle-ages progress their careers and even prepare for retirement, it becomes important to make sure everything is on track health-wise, as well. Whether you have a family of teenagers or young adults or not, there are several instances in which health insurance can be useful for established adults.

7. Established single parent health insurance

This profile covers mostly middle-aged to mature single parents with an older but still dependent child or children.

Teenagers in the household may benefit from things like dental insurance to cover orthodontics work (if the parent themselves had braces as a child) and regular check-ups. Other extras cover benefits can include optical cover for teens with glasses, and possibly physiotherapy cover for active teens who are more likely to encounter sports injuries.

Parents at this life stage might consider adding cover for heart trouble and other age-related concerns now – before they develop those conditions – to prevent pre-existing condition restrictions later on down the track. A good quality Hospital and Extras policy can cover this, plus extras cover benefits such as optical cover for reading glasses, dental cover for fillings or root canal, and more.

What to look for: These families have stopped growing, so they no longer need cover for obstetrics and IVF. These parents should consider what their children need, and what health conditions they themselves are dealing with on an ongoing basis.

8. Established couples’ health insurance

This profile covers mostly middle-aged to mature couples who don’t plan to have children or at least are postponing a family. Just because you don’t have kids, though, doesn’t mean you yourself won’t have health needs as you age. Now is a life stage when it may be easier to afford health insurance, and the range of benefits on offer can be quite useful as couples grow older.

What to look for: These couples may begin considering cover for heart trouble and other age-related concerns now – before they develop those conditions – to prevent pre-existing condition restrictions later on down the track. A good quality Hospital and Extras policy can help with other benefits such as optical cover for reading glasses, dental cover for fillings or root canal, and more.

9. Established family health insurance

This profile covers mostly middle-aged to mature couples with older but still dependent children.

Teenagers in the household may benefit from things like dental insurance to cover orthodontics work (if the parent themselves had braces as a child) and regular check-ups. Other extras benefits can include optical cover for teens with glasses, and possibly physiotherapy cover for active teens who are more likely to encounter sports injuries.

Parents at this life stage might consider adding cover for heart trouble and other age-related concerns now – before they develop those conditions – to prevent pre-existing condition restrictions later on down the track. A good quality Hospital and Extras policy can cover this, plus extras cover benefits such as optical cover for reading glasses, dental cover for fillings or root canal, and more.

What to look for: These families have stopped growing, so they no longer need cover for obstetrics and IVF. These parents should consider what their children need, and what health conditions they themselves are dealing with on an ongoing basis.

10. Established singles’ health insurance (male/female)

This profile covers mostly middle-aged to mature singles with no dependent children. Now is a life stage when it may be easier to afford health insurance, and the range of benefits on offer can be quite useful as singles age.

What to look for: These singles may need to begin considering cover for health conditions such as heart trouble and other age-related conditions. A good quality Hospital and Extras policy can help with other benefits such as optical cover for reading glasses, dental cover for fillings or root canal, and more.

See below for a snapshot of the current low premium policies available for middle-aged adults. Please note that this table has been formulated for a single male seeking hospital and extras cover in NSW with links direct to the providers websites.

Health insurance for mature aged people

Due to the natural processes of ageing, seniors’ health insurance requirements differ from that of young singles, and it becomes even more important to take care of your health as you age. The cost of healthcare is currently the number one cost for seniors in Australia, and how long you wait to be treated has a direct impact on your quality of life during retirement (AIHW).

11. Mature singles’ health insurance (male/female)

This profile caters to mature singles (both male and female) that no longer have or never had dependent children.

What to look for: This profile may be looking for Hospital cover such as benefits towards cardio-thoracic surgery, hip and knee replacements, or other surgeries; and Extras cover such as dental cover for crowns and dentures, optical cover for multi-focal lenses, and chiropractic or physiotherapy care.

For more information on what to look for in health insurance for seniors, click here.

12. Mature couples’ health insurance

This profile caters to mature couples that no longer have or never had dependent children.

What to look for: This profile may be looking for Hospital cover such as benefits towards cardio-thoracic surgery, hip and knee replacements, or other surgeries; and Extras cover such as dental cover for crowns and dentures, optical cover for multi-focal lenses, and chiropractic or physiotherapy care.

For more information on how to update your health insurance when you become empty nesters, click here.

See below for a snapshot of the current low premium policies available for mature couples without pregnancy cover. Please note that this table has been formulated for a mature couple seeking hospital and extras cover in NSW with links direct to the providers websites.

When you’re ready to buy health insurance…

You can search for a health insurance policy – whether you’re looking for Hospital Cover and/or Extras Cover – through the Canstar website. Canstar regularly researches and rates health insurance for all the different life stages listed above. The many benefits of taking out private health insurance should be quite clear, and there’s no time like the present if you’re in a life stage where health insurance would come in handy.

Our comparison tables are sorted to show you the policies that receive our 5-star rating for outstanding value, and then sorted alphabetically by insurer. We compare different health insurance policies and providers for price and value for money, coverage and benefits, and terms and conditions of coverage:

Compare Health Insurance

Related

The Star Ratings in this table were awarded in September 2018 and data is as at that date, updated from time to time to reflect product changes notified to us by product issuers.

Products displayed above that are not “Sponsored” are sorted as referenced in the introductory text to the table and then alphabetically by company. Canstar may receive a fee for referral of leads from these products. See How We Get Paid for further information. If you decide to apply for health insurance, you will deal directly with an insurance provider, and not with Canstar.

Consider the provider’s detailed product and pricing information before making a decision to purchase a policy. The products displayed on this page do not include all providers and may not compare all features relevant to you. View the Canstar Health Insurance Star Ratings Methodology and Report. The rating shown is only one factor to take into account when considering products.

Sponsored products are paid advertisements and do not include all providers. Canstar receives a fee for referring you to the advertiser. Canstar is not giving you advice in relation to sponsored products.

This advice is general and has not taken into account your objectives, financial situation, or needs. Consider whether this advice is right for you. Consider the product disclosure statement (PDS) before making any financial decision. For more information, read Canstar’s Financial Services and Credit Guide (FSCG).

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Statistics referenced on this page have been verified by Canstar Research. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917.